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Monday, 09 May 16
DRY BULK SHIPPING TO WITNESS STEADY PROGRESS MOVING FORWARD ON THE BACK OF GROWING TRADE VOLUMES - BIMCO
 In its latest short-term analysis of the shipping markets, BIMCO reiterated its optimism on the prospects of the dry bulk market moving forward. According to BIMCO, transported volumes are expected to grow slowly – as they seasonally do – from the first quarter into the second. This ought to underpin the freight market.
“Notably, we expect a new record volume of combined grain and soybean exports this year from Argentina and Brazil. We do not anticipate a massive rise in freight rates for handysize, supramax and panamaxes on the back of this, as ships are already waiting around the main loading areas. Nevertheless, it should give a boost in confidence, a confidence that Moore Stephens in March assessed to be at a record low”, said BIMCO’s report.
Another positive indication of China not being as vulnerable as some may believe, which is supporting the soft landing trajectory, is the improving domestic steel prices, seen since mid-February. In the international markets, spot iron ore prices have also rebounded from USD 41 per MT at the beginning of 2016 to see USD 56 per MT in mid-April. Very different from the peaks of the past, but a positive indicator in the midst of all this surrounding uncertainty.
“We are still worried about the sustainability of freight rates in the years to come. Our main worry is that demolition activity will slow down as the BDI improves. If shipowners slow demolition of ships considerably, the fleet will keep growing. This will widen the fundamental imbalance further because we forecast the demand side to grow slowly in the coming years. In order to reverse several years of adding capacity in excess of demand growth, we need to develop a multi-year trend of negative fleet growth. BIMCO assess the current utilisation rate of the dry bulk fleet at the low end of the 70s”, said the report.
Looking further ahead, BIMCO noted that “coal imports into India may change. If the retained political vision of making India self-sufficient in thermal coal becomes reality. Surely the jury is still out on that. In November 2013 the then Indian Power Minister Goyal was “very confident”, when saying India may stop thermal coal imports in two to three years, as domestic production would increase. Mr. Goyal, now being India’s Energy Minister repeated the exactly the same words in April 2016. “We want to completely stop its import over the next two to three years”. India imported 171 million tonnes of thermal coal in 2015, slightly down from 176 million tonnes in 2014. SSY expects India to import 170 million tonnes of thermal coal in 2016”, it noted.
Supply
Meanwhile, “despite a record high volume of demolished dry bulk shipping capacity in the first three months of 2016, the total dry bulk fleet still grew. 16.7 million DWT of new capacity entered the fleet while 14 million DWT was sold for scrap. All in line with BIMCO’s forecast.
Not all of the dry bulk sub-segments saw an increase in fleet size. The capesize fleet, for instance, which has doubled over the past 6½ years, reduced in number (7 ships less) as well as capacity (-0.2%) in Q1-2016. For the full year, BIMCO holds unchanged expectations for deliveries and demolitions, which means we expect the fleet to grow by 1.1% or 10 million DWT in 2016. What has changed though from our January report is the slippage rate of deliveries, now at 50% up from 40%. Owners and investors are working hard to delay the delivery of new ships into a miserable freight market”, said the report.
According to BIMCO’s Chief Shipping Analyst, Mr. Peter Sand, “as deliveries offer traces of past optimism, most interestingly the appetite for signing new contracts for dry bulk ships at the world’s shipyards has ceased. Until the middle of March, only four new contracts had been signed, three at Japanese shipyards and one in China. During March and April, the long anticipated orders for 30 VLOCs with a capacity of 400,000 DWT each are now confirmed. Lifelong time charter contracts (27-years) appears to have been awarded to all of them already. This is the latest development that ties China and Vale closer to each other again, after their fallout following the disputes over the original batch of valemax VLOCs which were not allowed to call at Chinese ports for several years”.
He added that “without doubt this is bad news for international owners and operators. Each VLOC can carry an estimated 1.6m tons of iron ore from Tubarao, Brazil to Baoshan, China per annum. This new batch of VLOCs, will remove 48 million tons of iron ore from the “open market”. As the current fleet of 34 VLOCs (2011-2015) already carries a total of 54.4m tons of cargo, the best front-haul leg in dry bulk shipping is crippled even further by this industrialisation of trade. In 2015, Brazil exported 191.6 million tons of iron ore to China; the existing and new valemax between them will be able to carry over half Brazil’s current annual iron ore exports. The 30 new VLOCs are due for delivery in 2018-2019”.
Demand
In terms of demand, BIMCO said that “on 10 February 2016, the Baltic Dry Index (BDI) hit 290. At that point, a bulk carrier regardless of its size, age and fuel-efficient qualities earned a time charter average of USD 2,417-2,776 per day. Whereas the three smaller segments have seen higher earnings since then, Capesize earnings lost ground up until the end of March. By mid-April, the gap closed and capesizes are back on par with the pack. Despite the fact that earnings have doubled in those two months, they remain below OPEX levels for the largest part of the fleet. Despite the many attempts by steel mills around the world to fend off Chinese steel from their home market, China’s steel export volumes did not fall significantly in January and February. Export dropped by just 1.6% to 17.85 million tonnes. New data for March showed exports of 10 million tonnes. In 2015, China flooded the world market as 112 million tons were exported, bringing down scrap steel prices in the wake of it.”
It added that “global crude steel production for January and February combined was 5.6% lower than in the same period of 2015, according to Worldsteel. Crude steel production in China was down 6.5% at the same time. The three key items to watch out for in 2016 are Chinese imports of coal and iron ore, as well as how much dry bulk tonnage is going to be demolished. Nothing else really matters to an extent that can either improve or damage the fundamentals of the dry bulk shipping market. In the midst of doom, gloom and uncertainty for shipbuilding, China’s combined imports of the two key commodities in the first two months fared better than we thought. The trouble is, however, that it did not bring decisive support to the freight market. Chinese iron ore imports grew by 6.4% to 155.8 million tonnes over the first two months versus this time a year ago. While coal imports to China fell by 10% to 28.8 million tonnes over the same period. New data for March … all positive. Chinese iron ore imports were 85.8 million tonnes, while coal imports rose to 19.7 million tonnes. The strong coal imports over March all but levelled out the drop in January and February. Q1 coal import growth was down by 1.2% year on year”, BIMCO concluded.
Source: Nikos Roussanoglou, Hellenic Shipping News
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Wednesday, 11 May 16
MARKET INSIGHT - KATERINA RESTIS
On Saturday 7th May, Riyadh replaced the long-serving oil minister of more than two decades, Ali-Al-Naimi, as part of a major government overhaul, ...
Tuesday, 10 May 16
VOLATILITY? VARIATION NO ENIGMA TO SHIPPING..... - CLARKSONS
Along with cyclicality, the other characteristic of the shipping markets which receives frequent mention is volatility. This is so evident that the ...
Monday, 09 May 16
INDONESIAN CS COAL INDICES UP CONTINUES; POSITIVE DIRECTION
COALspot.com: Average 5000 GAR coal index of Indonesian origin up 0.10 percent week over week to averaging $38.82 per ton on this past Wednesday, a ...
Monday, 09 May 16
BALTIC DRY INDEX ENDS WEEK ON A NEGATIVE NOTE
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities decline this week.
The freight market was weak and a ...
Friday, 06 May 16
U.S. WEEKLY COAL PRODUCTION UP 9 PERCENT W/W; DOWN 35.3 PERCENT Y/Y - EIA
COALspot.com – U.S the world’s second largest coal producer has produced approximately totaled an estimated 11.3 million short to ...
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- VISA Power Limited - India
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- Iligan Light & Power Inc, Philippines
- McConnell Dowell - Australia
- Energy Development Corp, Philippines
- Indian Oil Corporation Limited
- Samtan Co., Ltd - South Korea
- Bukit Baiduri Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Formosa Plastics Group - Taiwan
- SMC Global Power, Philippines
- Anglo American - United Kingdom
- The University of Queensland
- Kobexindo Tractors - Indoneisa
- Uttam Galva Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dalmia Cement Bharat India
- Sinarmas Energy and Mining - Indonesia
- SMG Consultants - Indonesia
- Mintek Dendrill Indonesia
- Intertek Mineral Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
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- Power Finance Corporation Ltd., India
- Ministry of Transport, Egypt
- Singapore Mercantile Exchange
- Toyota Tsusho Corporation, Japan
- Standard Chartered Bank - UAE
- Tata Chemicals Ltd - India
- Savvy Resources Ltd - HongKong
- Trasteel International SA, Italy
- Georgia Ports Authority, United States
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- IEA Clean Coal Centre - UK
- TeaM Sual Corporation - Philippines
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- Independent Power Producers Association of India
- Central Electricity Authority - India
- ICICI Bank Limited - India
- Krishnapatnam Port Company Ltd. - India
- AsiaOL BioFuels Corp., Philippines
- Energy Link Ltd, New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Parliament of New Zealand
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- Indonesian Coal Mining Association
- Orica Australia Pty. Ltd.
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- Indian Energy Exchange, India
- Aboitiz Power Corporation - Philippines
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- Pendopo Energi Batubara - Indonesia
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- New Zealand Coal & Carbon
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- Leighton Contractors Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Port Waratah Coal Services - Australia
- MS Steel International - UAE
- PTC India Limited - India
- Kaltim Prima Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- International Coal Ventures Pvt Ltd - India
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- Bhushan Steel Limited - India
- Coal and Oil Company - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Mining Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Heidelberg Cement - Germany
- Videocon Industries ltd - India
- GVK Power & Infra Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Thiess Contractors Indonesia
- Medco Energi Mining Internasional
- Semirara Mining and Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Deloitte Consulting - India
- India Bulls Power Limited - India
- Coalindo Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Bukit Makmur.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- CIMB Investment Bank - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- Merrill Lynch Commodities Europe
- Alfred C Toepfer International GmbH - Germany
- Neyveli Lignite Corporation Ltd, - India
- Agrawal Coal Company - India
- Jorong Barutama Greston.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Eastern Coal Council - USA
- TNB Fuel Sdn Bhd - Malaysia
- Sree Jayajothi Cements Limited - India
- White Energy Company Limited
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- Essar Steel Hazira Ltd - India
- Ceylon Electricity Board - Sri Lanka
- IHS Mccloskey Coal Group - USA
- Indogreen Group - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Goldman Sachs - Singapore
- Ministry of Mines - Canada
- Rashtriya Ispat Nigam Limited - India
- Electricity Authority, New Zealand
- Aditya Birla Group - India
- South Luzon Thermal Energy Corporation
- Gujarat Mineral Development Corp Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Bharathi Cement Corporation - India
- Barasentosa Lestari - Indonesia
- Cement Manufacturers Association - India
- LBH Netherlands Bv - Netherlands
- Commonwealth Bank - Australia
- Petron Corporation, Philippines
- Romanian Commodities Exchange
- Miang Besar Coal Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- SN Aboitiz Power Inc, Philippines
- Rio Tinto Coal - Australia
- Bhoruka Overseas - Indonesia
- Wood Mackenzie - Singapore
- Semirara Mining Corp, Philippines
- Star Paper Mills Limited - India
- Holcim Trading Pte Ltd - Singapore
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- Kumho Petrochemical, South Korea
- Billiton Holdings Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Australian Coal Association
- Banpu Public Company Limited - Thailand
- Riau Bara Harum - Indonesia
- Chamber of Mines of South Africa
- Xindia Steels Limited - India
- Borneo Indobara - Indonesia
- GAC Shipping (India) Pvt Ltd
- Planning Commission, India
- Karbindo Abesyapradhi - Indoneisa
- Sojitz Corporation - Japan
- The Treasury - Australian Government
- Meenaskhi Energy Private Limited - India
- Maheswari Brothers Coal Limited - India
- Madhucon Powers Ltd - India
- Tamil Nadu electricity Board
- Ambuja Cements Ltd - India
- Central Java Power - Indonesia
- Altura Mining Limited, Indonesia
- Jaiprakash Power Ventures ltd
- Therma Luzon, Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Ministry of Finance - Indonesia
- Malabar Cements Ltd - India
- Sakthi Sugars Limited - India
- Mjunction Services Limited - India
- Siam City Cement - Thailand
- Binh Thuan Hamico - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Minerals Council of Australia
- Jindal Steel & Power Ltd - India
- Makarim & Taira - Indonesia
- GMR Energy Limited - India
- Posco Energy - South Korea
- Manunggal Multi Energi - Indonesia
- Chettinad Cement Corporation Ltd - India
- CNBM International Corporation - China
- Africa Commodities Group - South Africa
- Carbofer General Trading SA - India
- Grasim Industreis Ltd - India
- Larsen & Toubro Limited - India
- PNOC Exploration Corporation - Philippines
- London Commodity Brokers - England
- Sical Logistics Limited - India
- Attock Cement Pakistan Limited
- Bhatia International Limited - India
- Mercuria Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bayan Resources Tbk. - Indonesia
- Latin American Coal - Colombia
- PowerSource Philippines DevCo
- Thai Mozambique Logistica
- Australian Commodity Traders Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bangladesh Power Developement Board
- San Jose City I Power Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Vedanta Resources Plc - India
- Siam City Cement PLC, Thailand
- Marubeni Corporation - India
- Simpson Spence & Young - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
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- Metalloyd Limited - United Kingdom
- Antam Resourcindo - Indonesia
- Interocean Group of Companies - India
- Edison Trading Spa - Italy
- Vizag Seaport Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Economic Council, Georgia
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